Here’s how two key Singapore industries (and workers) can transform in times of crisis

The economic and social impact of Covid-19 is clearer by the day. Many businesses in Singapore are bracing themselves for a downturn lasting months.

Exports declined by 4.8 per cent in February 2020 and the Ministry of Trade and Industry has slashed Singapore’s 2020 gross domestic product (GDP) growth forecasts to a range of -4 to -1 per cent.

However, this might be an opportune time for companies and industries to deepen their capabilities, adopt new technologies and upskill their employees to meet the new challenges facing businesses.

While the focus has been on Singapore’s badly-hit aviation sector, other key industries such as the maritime and construction industries which employ 170,000 and 104,000 Singaporeans respectively in 2018 have been negatively impacted by declining international trade and lower demand for large scale infrastructure projects.

This is worrying as ports are a vital component to Singapore’s economy and construction was a key driver behind Singapore’s GDP growth in past quarters, contributing 4 per cent of Singapore’s 2019 GDP.   

With lower levels of economic activity, these industries which are known to have difficulties transforming should consider experimenting with new technologies during this down time.

PORT AUTOMATION

In 2015, the Maritime and Port Authority of Singapore began constructing Tuas Port, a next-generation container terminal costing S$20 billion that is expected to be fully operational by 2040. 

The decrease in port activities due to Covid-19 permits the live testing of new innovations that can boost productivity within the maritime industry, such as sensor-guided driverless vehicles, optical recognition software to identify containers, remote control cranes to adjust container stacks and algorithms to sort out containers efficiently.

Such technologies have been found in other automated ports, such as the Long Beach Container Terminal (LBCT) in California, the largest automated port in North America. Far from stealing jobs, it has created potentially better-paying and fulfilling jobs for Americans.

The development of smarter ports creates a concern of technology taking away manual jobs, it also creates a demand for more port operators and marine engineers who are tech-savvy and offers opportunities for current maritime workers to upgrade their skills and develop their careers.

In LBCT, older Americans are being rehired as they have existing skills and decades of experience in the maritime sector, and needed only minor training to operate new technologies. 

In Singapore’s case, local workers can rely on the Maritime Cluster Funds for Manpower Development and Productivity to upgrade their skills to take on more knowledge-intensive jobs, while maritime companies can make use of the fund to adopt technologies to improve business processes.

With Tuas Port being the world’s biggest fully automated terminal when completed, the long-term benefits for both businesses and workers seen in LBCT will be multiplied in Singapore.

The Covid-19-driven downturn will require immediate fiscal spending by the Government but it should not be tempted to hold off investing in Tuas Port.

The long-term investments in new technologies and automation in Singapore’s ports can facilitate faster recovery once international trade normalises.

CONSTRUCTING WITH TECH

Thus far, the pandemic has contributed to a 4.3 per cent contraction in the construction sector in the first quarter of 2020 compared to 2019. The lockdowns in other countries have disrupted supply chains and delayed the return of foreign workers upon whom the construction sector relies heavily.

Even before this slowdown, the construction industry in Singapore has long suffered from an image of harsh, manual work which is unattractive to Singaporeans.

With Budget 2020 announcing the inevitable reduction of the S-Pass Dependency Ratio Ceiling for the construction sector from 20 per cent to 15 per cent by 2023 and the increased travel restrictions worldwide, employers will face challenging manpower constraints.

To address this issue, construction companies in Singapore should consider relying on technologies such as pre-fabrications or 3D-printing to reduce the industry’s vulnerability to supply and labour disruptions.

Questions over the structural integrity of 3D-printed buildings have often been a cited reason behind the slow adoption of 3D printing in construction.

However, small futuristic companies such as AI SpaceFactory in the United States have proven that 3D-constucted buildings are able to withstand the harsh conditions of space.

With 10,920 new engineering and 3,991 information technology talents graduating from local polytechnics and universities in 2018 alone, the local talent pool already exists for high growth and high-tech construction companies to tap on.

Existing workers in the sector, armed with both relevant skills and experience need to undergo only minor levels of retraining to use these new technologies.

To start the ball rolling, the Housing and Development Board’s Centre of Building Research has started experimenting with 3D printing, and it has shown capabilities in printing walls, benches and other smaller features.

The 3D printer costs an initial S$900,000. Companies that find this cost prohibitive can rely on the increased Enterprise Financing Scheme which provides small and medium enterprises with loans of up to S$1 million to finance these costly investments.

Collaborating with the HDB or the Building and Construction Authority to co-research these new technologies is another way the construction sector can reinvent themselves, becoming more attractive to locals.

LEARNING DURING THE DOWNTIME

While companies can experiment with new technologies during this downtime, individual Singaporeans also have a role in reshaping Singapore’s industries.

Covid-19 may weigh heavily on the minds of many now. But the long-term global trends of tech-led economic transformation will occur regardless of this pandemic.

Not preparing for this transformation now will put Singaporeans at a disadvantage once the pandemic has been dealt with. Flexible working arrangements, automation and tech-infused working environments will be the new norm and Singaporeans still need to prepare for the inevitable.

The Government has recognised the possible employment concerns of a tech-led economic transformation and to address this concern, its approach has been to promote continuous education and training.

In April, Singaporeans can tap the one-off S$500 top-up of the SkillsFuture Credit announced in Budget 2020 to prepare themselves for the tech-led economic transformation.

Workers who become unemployed due to Covid-19 will also receive S$800 per month for three months while they find new jobs or enrol for training, under a new grant in the Resilience Budget.

As businesses weather the impact of Covid-19, they should strive to make the best of the downtime situation to experiment with new technologies and processes without affecting their daily operations.

Singaporeans also need to experiment by updating their skill sets and taking full advantage of the various Government-related training schemes to ensure that when the Covid-19 storm passes, they are better prepared to ride the waves of recovery.

ABOUT THE AUTHORS:

Dr Faizal Yahya and Shazly Zain are respectively a senior research fellow and a research assistant at the Institute of Policy Studies.